Savvy Senior: There’s some good news about 2012 Medicare costs

DEAR SAVVY SENIOR: I know we will be getting a slight increase in our Social Security checks next year but what about our Medicare costs? What will the Medicare premiums and deductibles cost seniors in 2012? — Looking Ahead

DEAR LOOKING: The new Medicare premium, deductible and copay charges for 2012 were all announced a few weeks ago and the news was actually pretty good. Here’s a breakdown of what retirees can expect to pay for Medicare starting in January.

For most Medicare beneficiaries who enrolled in 2009 or earlier, your monthly premiums for Part B (which covers doctor visits and outpatient care) will increase only $3.50 to $99.90 in 2012. That’s much less than was predicted by the government earlier in the year.

The increase is the first in four years for most people with Medicare, mainly because of the federal law that freezes Part B premiums when there’s no Social Security cost-of-living adjustment (COLA), which was the case in 2010 and 2011. But, Social Security recently announced a 3.6 percent COLA for 2012.

That 3.6 percent increase will boost monthly Social Security checks by an average of about $43 for retirees next year. So, even after your Part B premiums get deducted from your Social Security checks, you’ll still have about $40 more every month.

The news for younger retirees is even better. Medicare Part B beneficiaries that enrolled in 2010, who’ve been paying $110.50 per month, and those that enrolled in 2011, who are currently paying $115.40 per month, will see their Part B premiums go down to $99.90.

And high-income beneficiaries, who’ve been paying higher Part B premiums because their annual incomes are more than $85,000, or $170,000 for joint filers, also will see their monthly Part B premiums drop in 2012. Here’s a breakdown of what they will pay next year based on their income level.

• Individuals with incomes of $85,000 to $107,000, or married couples filing joint tax returns with incomes of $170,000 to $214,000 will pay $139.90 per person per month for Part B. That’s a $21.60 reduction from this year’s premium.

• Individuals earning $107,000 to $160,000, or married couples with incomes of $214,000 to $320,000 will pay $199.80 — a $30.90 reduction.

• Individuals with incomes of $160,000 to $214,000, or couples with incomes of $320,000 to $428,000 will pay $259.70 — a $40.20 reduction.

• Individuals over $214,000 or couples above $428,000 will pay $319.70 each per month for Part B. That’s $49.40 less that this year.

Other Medicare changes you need to know about that will affect all beneficiaries include the Part B deductible, which will be $140 in 2012, a decrease of $22. And the deductible for Part A, which covers inpatient hospital care, will rise by $24, to $1,156 next year.

For more information on all the Medicare premiums and coinsurance rates for 2012 see medicare.gov/cost or call 800-633-4227.

If you’re a high-income beneficiary and your income has fallen since 2010 (the tax year used to determine your 2012 premiums) you may be able to reduce or eliminate your Medicare Part B premium surcharge. To qualify, your income loss must be tied to a life-changing event such as a marriage or divorce, a job loss or reduced work hours (including retirement), loss of income from income-producing property, or cuts in pension benefits. To learn more see ssa.gov/pubs/10536.html.

And for lower-income retirees who are having a difficult time paying their Medicare costs, help is available through Medicare Savings Programs. These are Medicaid-administered programs that pay Part B premiums and depending on your finances may even pick up the tab on your copayments and deductibles. To find out if you qualify contact your local Medicaid office — call 800-633-4227 for contact information.

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